U.S. Department of Justice Office of Justice Programs Bureau of Justice Statistics ------------------------------------------------------------ This file is text only without graphics and many of the tables. A Zip archive of the tables in this report in spreadsheet format (.csv) and the full report including tables and graphics in .pdf format are available on BJS website at:http://www.bjs.gov/index.cfm?ty=pbdetail&iid=4556 ------------------------------------------------------------ State Corrections Expenditures, FY, 1982-2010 Tracey Kyckelhahn, BJS Statistician Between 1982 and 2001, total state corrections expenditures increased each year, rising from $15.0 billion to $53.5 billion in real dollars. Between 2002 and 2010, expenditures fluctuated between $53.4 billion and $48.4 billion. Preliminary data from the Census Bureau’s Annual Survey of State Government Finances indicated that states spent $48.5 billion on corrections in 2010, a decline of 5.6% since 2009. Corrections expenditures fund community supervision, confinement, and rehabilitation of adults and juveniles convicted of offenses, as well as confinement of persons awaiting trial or adjudication. State corrections expenditures also include the costs of operation and employment for prisons, probation and parole offices, pardon proceedings, correctional administration, and intergovernmental transfers. ************************************** ******************* State expenditures ******************* In 2010, state expenditures totaled $1.9 trillion dollars while state spending on corrections was $48.5 billion. Between fiscal years 1982 and 2010, spending on orrections represented between 1.9% and 3.3% of total expenditures by state governments. Since 2003, corrections expenditures, as a share of total spending, fluctuated between 2.5% and 2.9% of state expenditures (figure 1). Between 1982 and 2010, spending on education varied between 29% and 33% of total state expenditures, spending on public welfare varied between 22% and 25%, spending on highways varied between 5.7% and 8.6%, and spending on health care and hospitals varied between 6.2% and 7.5%. Other expenditures (including air transportation, financial administration, police protection, and public safety expenditures) ranged between 29% and 32% of state expenditures. **************************************** States spent about three-quarters of the corrections budget on correctional institutions **************************************** Between 1982 and 2010, spending on correctional institutions, such as state prisons and residential work release units, represented the largest component of state corrections expenditures, ranging from $11.2 billion to $41.0 billion. As a share of total corrections expenditures, spending on institutions ranged from 73% to 80%. (For information on correctional institutions, see Methodology.) Expenditures related to probation, parole, the administration of a correctional agency, the training of correctional employees, and nonresidential halfway houses and community corrections centers were counted as other (noninstitutional) correctional expenditures (figure 2). Noninstitutional corrections expenditures ranged from $3.8 billion to $12.9 billion, and comprised between 20.4% and 27.3% of total corrections expenditures. **************************************** Direct expenditures on institutions were divided between capital outlay and operations **************************************** Capital outlay expenditures included spending on construction, renovations, and major repair of institutions; purchase of land, rights-of-way, and existing structures; title searches and related costs; and purchase of equipment having a useful life of more than 5 years. Between 1982 and 1991, institutional capital outlays increased, reaching a peak of $4.6 billion in 1991 (figure 3). Capital outlays comprised between 8.5% and 13.6% of total corrections expenditures during those years. Between 1992 and 2001, capital outlays varied between $2.7 billion and $4.0 billion, comprising between 5.0% and 10.3% of total corrections expenditures. From 2002 to 2010, capital outlays made up $2.3 billion or less each year and less than 5% of state correctional expenditures. Part of capital outlay expenditures represents spending to construct new prisons to house additional inmates. Between 1982 and 2010, spending on institutional capital outlay correspond strongly with changes in state prison population (correlation coefficient of .75). At its peak, spending on capital outlay for institutions was widespread among states (table 1). Between 1982 and 1991, 32 states spent at least 20% of their total corrections expenditures on capital outlays for 1 year or more. From 2002 to 2010, this was true of only two states (not shown in table). (See appendix table 3 for state comparisons.) The number of prisoners held in state and private prisons increased every year from 371,522 inmates in 1982 to a peak of 1,323,557 in 2008 (table 2). This report uses custody counts. (See Methodology for a description of custody counts and juridiction counts). The population decreased in 2009 (1,319,364 inmates) and 2010 (1,316,858). The annual population growth rate declined to less than 3% starting in 2000, after remaining more than 6% from the mid-1980s to the mid-1990s. The annual population growth reached a high of 12% in 1989. ******************************************* Operational expenditures, as a share of total expenditures, grew from 1982 to 2010 ******************************************* Correctional institutions’ operational expenditures included compensation of officers and employees and supplies, materials, and contractual services exclusive of capital outlay. The costs incurred by states to operate institutions steadily increased from 1982 to 2000, after which they remained steady (figure 4). Due to the decline in other components of state corrections expenditures between 2000 and 2010, institutions’ operational expenditures increased steadily as a share of total expenditures from just under two-thirds in the 1980s to three-quarters after 2005 (not shown in table or figure). At the national level, operational expenditures per inmate in a state or private prison declined to under $30,000 per year starting around 2004, a level last seen in the early 1980s. At the state level, the median operational expenditures per inmate posted a similar trend as the national mean, declining to under $30,000 per year in 2005. From 1982 to 2010, the 25th percentile fluctuated between $21,243 and $26,452, and the 75th percentile fluctuated between $37,084 and $43,178. ******************************************* Changes in state operations expenditures from 1999 to 2010 ******************************************* Regression analysis was used to assess increases and decreases in state correction expenditures from 1999 to 2010. For each state, three regressions were run to determine trends in expenditures during this time period. States were grouped according to patterns of changes, including linear decreases and increases and other changes in direction (table 3). (See Methodology for a description of the technique used to detect change, determine statistical significance, and classify the direction of the change in per capita expenditures.) The regression analysis of per capita trends from 1999 to 2010 included 48 states. Utah and West Virginia were excluded due to data quality issues. * 11 states showed a linear decrease in current operations expenditures per inmate from 1999 to 2010, with an average annual decline of $1,093 per inmate (figure 5). * 5 states had a linear increase, with an average annual increase of $1,277 per inmate. Among 32 states, the patterns of change in per capita expenditures fluctuated from 1999 to 2010 (figure 6). * 14 states had a decrease in per capita expenditures, followed by an increase. In 12 of the states, the increase started in 2005 or later. * 1 state had an increase followed by a decrease. * 8 states experienced an increase in per capita expenditures, followed by a decrease and a subsequent increase in expenditures. * 2 states had a decrease in per capita expenditures followed by an increase and then another decrease. * 7 states experienced either flat per capita expenditures or did not have a discernible trend in the analyses conducted. ******************************************* Medical care expenditures increased for correctional institutions in most states ******************************************* Forty-four states provided information on medical expenditures for both 2001 and 2008. For all states except Texas (down 8.1%) and Illinois (down 1.9%), medical expenditures increased during the 7-year period (table 4). New Hampshire (up 372%) exhibited the highest increase, while Nevada (up 4.5%) had the lowest increase. Thirty-six of the 44 states had an increase in per capita medical costs from 2001 to 2008, with seven reporting increases of 100% or more: New Hampshire (up 300%), Oregon (up 240%), North Carolina (up 199%), Alabama (up 120%), Arkansas (up 105%), Montana (up 103%), and Maryland (up 101%). Eight states reported decreases in medical expenditures per inmate: Nevada (down 17.5%), Maine (down 14.3%), Texas (down 12.7%), Pennsylvania (down 12.4%), Oklahoma (down 7.6%), West Virginia (down 5.2%), Illinois (down 4.3%), and North Dakota (down 4.0%). ************ Methodology ************ Expenditure data were extracted from the U.S. Census Bureau’s Annual Survey of State Government Finances. The survey collects expenditure information for federal, state, and local governments. This report includes state government corrections expenditures and components of those expenditures compiled by U.S. Census Bureau representatives. Data were collected from government audits, budgets, and other financial reports with the advice of state officers and employees. The information from these reports was placed into expenditure categories using the U.S. Census Bureau’s classification system. Data were verified with government officials before being released. Differences in functional responsibilities from state to state may prohibit the comparability of expenditure data across all jurisdictions, and caution should be exercised when comparing government expenditures. The Survey of State Government Finances is available on the U.S. Census Bureau’s website at http://www.census.gov/govs/. For information about the state component of the survey, see http://www.census.gov/govs/state. ********************** Medical expenditures ********************** State medical expenditures for correctional institutions were compiled using state government accounting spreadsheets. The Bureau of Justice Statistics (BJS) categorized all costs associated with medical care, including mental health and dental costs. Medical expenditures included medical personnel costs, contract medical services, operational costs associated with medical units, and capital outlay and supply expenditures related to providing medical care. The categorized expense data were sent to state budget officers twice for verification: once after the initial categorization and again for confirmation before publication. ******************************* National Prisoner Statistics ******************************* Data on custody and private prison counts were from the National Prisoner Statistics (NPS) series. The NPS began in 1926 under a mandate from Congress and collects annual statistics on prisoners at yearend. State departments of corrections and the Federal Bureau of Prisons voluntarily submit NPS data. The NPS distinguishes between prisoners in custody and prisoners under jurisdiction. The NPS custody counts include all inmates held within a state’s facilities, including inmates housed for other states. The custody counts exclude inmates held in local jails and in other jurisdictions. Therefore, in this report, inmate counts will differ from BJS reports that use jurisdiction counts. The NPS also includes information on private prisoners, which is included with the custody count in the inmate populations used in this report. However, some states are unable to distinguish between custody and jurisdiction. For information on those states, see Jurisdiction notes in the yearly Prisoners series reports located on the BJS website. The NPS has historically included counts of inmates in the combined jail-prison systems of Alaska, Connecticut, Delaware, Hawaii, Rhode Island, and Vermont. Preliminary data ------------------- Preliminary data were used for fiscal years 2009 and 2010. They are subject to change and will be superseded by data released approximately a year from their original publication. Although every effort is made to obtain financial information from state and local government entities, financial statements and completed questionnaires may not be available at the time the Census Bureau closes the processing. Missing data are imputed until complete data can be obtained. See the Census Bureau’s website for updates on release information: http://www.census.gov/govs/state/. Data from the Census Bureau’s Annual Survey of State Government Finances further detail state governments’ corrections expenditures, including data on capital outlay and current operations expenditures. Data describing government expenditures for fiscal years preceding 2010 were inflation-adjusted to 2010 dollars. ************************** Per capita calculations ************************** Total per capita expenditures were calculated using each state’s institutional current operations expenditures divided by its custody and private prison population. Per capita medical expenditures were calculated using each state’s medical expenditures divided by its custody population. Current operations expenditures pay for the housing of inmates in private prisons and in prisons operated by the state, while intergovernmental expenditures pay for state inmates under a state’s jurisdiction in facilities other than that state’s prisons, such as local jails. Given the inability to determine how much of a state’s intergovernmental expenditures pays for the housing of inmates versus other correctional costs, such as probation and parole, as well as the difficulty in determining the location of all prisoners under a state’s jurisdiction, operational expenditures were calculated only for those inmates in physical custody, including those in private prisons. To categorize states based on trends in per capita expenditures from 1999 to 2010, three regressions were run for each state: an equation to detect a linear increase or decrease per capita expenditures, an equation with a squared term to detect a single change in expenditure trends (increase to decrease or decrease to increase), and an equation with a cubed term to detect two changes during the time period. Two-tailed significance tests were conducted at the .05 confidence level. States were then categorized by the equation that had the most number of changes and was significant. For example, if a state was significant for both the linear equation and the squared equation but not the cubed equation, the state was classified by the squared equation. Those states which did not test as significant in any of the three equations either did not have a statistically significant pattern in per capita expenditures or had per capita expenditures that remained flat. Utah and West Virginia were removed from the analyses due to data quality concerns. For those states classified as having a linear trend in per capita expenditures, the linear term provided the annual increase or decrease in expenditures. For those states that had significant squared or cubed equations, the year(s) at which per capita expenditures changed direction was calculated by taking the first derivative of the equation and solving for the year(s). ************************ Adjusting for Inflation ************************ Government expenditures for fiscal years preceding 2010 were inflation adjusted to 2010 dollars, as appropriate for state government spending. Annual chain-type price indices for gross domestic product were employed as divisors, and unadjusted expenditures were employed as dividends to produce inflation adjusted expenditures in 2010 dollars. The U.S. Department of Commerce, Bureau of Economic Analysis, developed the price indices used in all inflation adjustments, as published in the Economic Report of the President. For more information on price indices, see the Economic Report of the President (2011), Table B- 7. Chain-type price indices for gross domestic product, 1962-2010, U.S. Government Printing Office, retrieved from http://www.gpo.gov/fdsys/pkg/ERP-2011/pdf/ERP-2011- table7.pdf. *********************** Terms and Definitions *********************** Correctional institutions--includes facilities, such as prisons, residential work release units, and detention centers, in addition to correctional farms, industrial schools and training schools. Correctional institutions also include the related educational, training, and health care programs for inmates, and some hospitals for the criminally insane. Corrections--involve the community supervision, confinement, and rehabilitation of adults and juveniles convicted of offenses and the confinement of persons awaiting trial or adjudication. Education expenditures--include the financing of schools, colleges, and other educational institutions (e.g., for blind, deaf, and other handicapped individuals), and educational programs for adults, veterans, and other special classes. Also included are activities of higher education institutions operated by the state, except for agricultural extension services and experiment stations and hospitals serving the public. Expenditures--include only external cash payments made from any source of funds, including any payments financed from borrowing, fund balances, intergovernmental revenue, and other current revenue. Intergovernmental transfers--the sum of payments made from one government entity to another, including grants-in-aid, shared revenues, payments in lieu of taxes, and amounts for services performed by one government for another on a reimbursable or cost-sharing basis (e.g., payments by one government to another for boarding prisoners). They exclude amounts paid to other governments for purchase of commodities, property, or utility services. Direct expenditures--all expenditures except those classified as intergovernmental. They include direct current expenditures (e.g., salaries, wages, fees, and commissions and purchases of supplies, materials, and contractual services) and capital outlays (e.g., construction and purchase of equipment, land, and existing structures). Note that capital outlays are included for the year in which the direct expenditure was made, regardless of how the funds were raised (e.g., bond issue) or when they were paid back. Highway expenditures--include construction, maintenance, and operation of highways, streets, and related structures, including toll highways, bridges, tunnels, ferries, street lighting, and snow and ice removal. Health expenditures--include outpatient health services; public health administration; research and education; categorical health programs; treatment and immunization clinics; nursing; environmental health activities, such as air and water pollution control; ambulance service, if provided separately from fire protection services; school health services, if provided by health agencies rather than school agencies; and other general public health activities, such as mosquito abatement. Hospital expenditures--include the financing, construction, acquisition, maintenance, or operation of hospital facilities, provision of hospital care, and support of public and private hospitals. Financing of nursing homes is included if they are directly associated with a government hospital. Public welfare expenditures--include support of and assistance to persons contingent upon their need, such as cash assistance paid directly to needy persons under the categorical programs (Old Age Assistance, Temporary Assistance for Needy Families (TANF), and other welfare programs; vendor payments made directly to private purveyors for medical care, burials, and other commodities and services provided under welfare programs; and provision and operation by the government of welfare institutions. Other public welfare includes payments to other governments for welfare purposes, amounts for administration, support of private welfare agencies, and other public welfare services. State custody count--the number of inmates a state holds in its facilities. A state may have custody of a prisoner over whom another state maintains jurisdiction. ****************************************************** The Bureau of Justice Statistics is the statistical agency of the U.S. Department of Justice. James P. Lynch is director. This report was written by Tracey Kyckelhahn. Thomas H. Cohen verified the report. Catherine Bird and Jill Thomas edited the report, and Barbara Quinn produced the report under the supervision of Doris J. James. December 2012, NCJ 239672 ****************************************************** ****************************************************** Office of Justice Programs * Innovation * Partnerships * Safer Neighborhoods * http://www.ojp.usdoj.gov ****************************************************** ______________________ 12/3/12/JER/12:25pm